Bank reconciliation can be the toughest part for bookkeeping. Some bookkeepers find bank reconciliation as a very interesting job., but there are those who find it very boring. Irrespective of how the professionals see it, it has always been the most essential operations. As you can see, even the checks that has been processed late.
Knowing the concept of bank reconciliation
The bank reconciliation is the process of accounts and giving enough details to the discrepancies. There may be differences, and this is due to the differences brought by the timing of registering in your book and the registering of information. Such discrepancy is a normal or typical situation and is rectified automatically within the small time. However, most frequently the discrepancy is due to a single mistake, which has to be rectified on hand and to catch this mistake, you need bank reconciliation. The firms generally do the bank reconciliation at the end of the month.
Why bank reconciliation is a must
First of all, maintaining a bank reconciliation every month will keep your company’s financial records updated and clear. Back log would be eliminated if you follow the rules of bank reconciliation. Moreover, you will be able to understand the status of your accounting from time to time. It is very important that you have quick and solid communication system with the monetary system. The bank reconciliation is the fundamental process in checking the balance on every bank statement on a specified date with the balance in your book. Charges at the bank are an additional to the deducted outstanding and amazing deposits. Outstanding or debit orders are additional to the payments.
Too many people in this world have hold a bank reconciliation at some point. However, since life is not perfect, there is a situation that bank reconciliation will not be balanced. And this could be due to some missing information, than the skills and knowledge of the person carrying out reconciliation. In such circumstances, the bank statements should always be reconstructed.
Depending on the size and extent of the entity concerned, a bank statement for a specific period could consist of several pages. If in any case, one page is missing, the reconciliation will not balance. Transactions on the missing page impacts on the result of the bank reconciliation clearly.
If you want to get the most of your firm, you need to take care of your financial transaction behind the principle of bank reconciliation.
Bookkeeping is basic in working your business in an efficient manner. It is very much important that you have an organized, transparent and most up to date system in place. Without a doubt, one of the best ways to keep track your records is the bank reconciliation.